Saturday, October 30, 2010

"Driven by improving same-store sales and customer traffic levels as well as growing optimism among restaurant operators, the outlook for the restaurant industry improved in September. The National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.3 in September, up a solid 0.8 percent from its August level (see chart above). In addition, the RPI rose above 100 for the first time in five months, which signifies expansion in the index of key industry indicators.

The RPI’s solid gain in September was the result of broad-based improvements among both the current situation and forward-looking indicators. Restaurant operators reported positive same-store sales and customer traffic levels for the first time in six months, which propelled the RPI’s Current Situation Index to its highest level in nearly three years."

MP: On a year-over-year basis, the RPI increased by 2.87% in September, the highest annual increase in at least four years (see bottom chart above).

3 Comments:

One has to wonder if part of the increase is due to food price increases. If restuarants have pricing power to pass on to customers then inflation is returning. Better business makes necessry price increases easier for restuarants.

One of the reasons restaurants are doing so well is that the bad economy is supplying them with low cost high skill labor. 13 percent of waters and waitresses, 16 percent of bartenders, 13 percent of parking lot attendants, and 7 percent of food preparation workers have at least a Bachelors degree.